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Boulder developer Mark Young sentenced to 2 years work-release in theft case

District judge also orders six years of probation

By Erica Meltzer, Camera Staff Writer

Posted:
08/10/2011 11:10:08 AM MDT

Updated:
08/10/2011 04:44:12 PM MDT

Mark Young (Boulder County Sheriff's Office)

A prominent Boulder developer who was convicted of theft in connection with a 2006 real estate deal was sentenced this morning to two years of work-release and six years of probation, during which time he will be barred from every type of economic activity on which he previously relied to earn his living.

Under the stringent terms of probation for economic crimes, Mark Young will not be able to borrow or lend money, enter into financial or real estate agreements, have control over investors' money, start any businesses or work for himself in any way until August 2017.

He cannot even open a new checking or savings account or buy a car without permission from his probation officer.

In handing down the sentence, Boulder District Judge Lael Montgomery said she was trying to strike a balance between this being Young's first felony conviction and the "enormity" of his crime -- stealing $51,000 from longtime friend and business partner Rudy Harburg.

Lindasue Smollen, Young's defense attorney, said she planned to file an appeal based on statute of limitations and other issues. The statute of limitations on theft is three years. Smollen said prosecutors failed to lay out in the charging documents when the crime was discovered.

Smollen also said the money dispute was civil in nature and never should have been treated as a crime.

Montgomery said Young has a history of "playing fast and loose with the rules" in his business dealings, and the string of lawsuits against him in Boulder County, which include an outstanding case related to his involvement in two medical marijuana dispensaries, speak to that.

However, she stressed that she wasn't sentencing him for those civil cases, but for felony theft. She also ordered him to pay more than $71,000 in restitution to Harburg.

Authorities began investigating Young in August 2009 when two men who had done business with Young complained to the Boulder County District Attorney's Office that he had taken their money through elaborate real estate transactions.

Young initially was arrested on four felony counts of theft, but those were dismissed when a Boulder County judge found insufficient evidence to try him on the charges. Upon appeal, a judge upheld one of the theft charges, and Young was found guilty earlier this year of taking $51,000 from Harburg, who agreed five years ago to partner with Young in developing a property at 720 Pearl St., according to an arrest warrant affidavit.

Young told Harburg and a third partner, Diane Washburn, that they needed to raise $150,000 for a down payment to buy the property, and they also needed collateral, according to the affidavit.

Harburg agreed to use his property at 1005 11th St. as collateral for the bank loan, investigators reported in the affidavit, and he agreed to pay $51,000 toward the $150,000 down payment.

Because Harburg gave more money than Young and Washburn, and because he provided collateral, he was made "managing member" and given control over the bank account, investigators reported. The deal closed on Aug. 1, 2006, and Young acted on behalf of the partnership because both Harburg and Washburn didn't come to the closing, according to the affidavit.

Years passed without progress on the 720 Pearl St. renovation because Harburg and Young were working on finishing construction on a separate property at 820 Pearl St. In December 2008, according to the affidavit, Harburg received a ticket and was served with a complaint alleging that the 720 Pearl partnership owed a property management company money for commissions earned for finding a tenant to lease the 720 Pearl St. space.

Because Harburg knew nothing about an attempt to find a renter, he began investigating and found title company documents showing that the $150,000 that Young said he needed for a down payment was an overpayment, according to the affidavit.

Harburg's property was the only collateral that the bank needed, investigators reported. As a result, the title company issued Young a check for $165,481 -- $150,000 plus $15,481.55 in escrow account overage -- and documents showed that Young deposited the money in an account that wasn't connected to the partnership, according to investigators.

"Bottom line, I have a wife who has loved me and believed in me for 40 years," Harburg said. "I feel like I let her down because I sold her on this project the same way he sold me on it."

"I sincerely hope Mark can find a way to change," Harburg said after the sentencing hearing.

Prosecutors asked for a four-year prison sentence in the case.

Smollen said Young was the sole support for his wife and two young children. Rather than being a criminal, he was a victim of the financial crisis, she said.

"If the markets hadn't crashed, we wouldn't be here today," she said.

Family and friends said Young was a loyal friend and loving father who never had any criminal intent.

"Mark is a person who has really strict standards for himself," said Lance Adams, who said he had known Young since he was 15. "He is not a person who would ever want to win by cheating. If he makes a deal with you, he will be there."

Speaking in a low voice that many in the courtroom strained to hear, Young said he was sorry for what he'd done and lamented the loss of his relationship with Harburg.

"We were friends, and now we're not," he said.

He said he always intended to pay back the money and pleaded not to be taken away from his children.

"I don't want to stop talking because when I stop, you're going to tell me what's going to happen," he said.

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